Solstice Neurosciences, Inc v Allergan, Inc (Corrected Version) - [2006] APO 2

ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 755556 in the name of SOLSTICE NEUROSCIENCES, INC

Title: Stable Liquid Formulations of Botulinum Toxin

Action: Opposition under section 59 (Patents Act 1990) by ALLERGAN, INC. Application for an extension of time in which to serve Evidence-in-Answer (regulation 5.10(2)).

Decision: Issued 21 February 2006 .
Abstract

The applicant requested (i) a 3 month extension of time to file Evidence in Answer and (ii) a direction from the Commissioner to defer the final date for filing of Evidence in Answer until determination of the acceptability of S 104 amendments filed with the request for extension of time.
The applicant filed amendments in response to arguments raised by the opponent in an opposition action in Europe and these requests were filed to allow time for the applicant’s expert to consider the amended claims. The delegate, however, considered that these amendments would not alter the case to be answered in the substantive opposition in Australia.
Although the delegate considered that the applicant had shown diligence in filing the amendments within 14 days of the outcome of the EP opposition being known, 18 months had elapsed since the finalizing of the Evidence in Support and the public interest was held not to be served by the further delay arising from the issuing of a direction as requested.
The delegate also considered that despite the absence of any Evidence in Answer having been yet filed, the applicant’s actions in continuing to prosecute the opposition and amending the specification indicated that when filed, it was highly likely that the Evidence in Answer would be directly relevant to the issues raised by the opponent.
The delegate decided, in view of the all the circumstances, and bearing in mind the decision in Race Lotto v AWA Limited [1998] APO 78, that the request to issue a direction be refused, but the 3 month extension be granted to allow the applicant sufficient time to file relevant evidence responding to the Evidence in Support.
Costs were awarded against the applicant.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 755556 by SOLSTICE NEUROSCIENCES, INC and opposition thereto by ALLERGAN, INC.

BACKGROUND

Patent application 722248 (the application) was filed under the provisions of the PCT as PCT/US99/20912 on 9 September 1999 by ELAN PHARMACEUTICALS, INC. The application entered the national phase in Australia as 58214/99 on 9 April 2001. Examination was requested on 15 October 2001 and the application was advertised accepted on 12 December 2002.
On 12 March 2003 a notice of opposition was lodged by ALLERGAN, INC (Allergan), followed by a statement of grounds and particulars on 16 June 2003. On 3 September 2004, in accordance with a request filed 20 August 2004, the name of the applicant was changed to SOLSTICE NEUROSCIENCES, INC (Solstice).
The opponent (Allergan) completed filing of evidence-in-support on 5 July 2004.
Evidence-in-Answer was originally due to be completed on 2 October 2004. The applicant (Solstice) obtained four extensions of time to file Evidence-in-Answer on 21 October 2004 (3 months), 24 January 2005 (3 months) and 26 April 2005 (3 months). On 20 May 2005 a direction was made by the Commissioner under Reg. 5.10(1) to defer Evidence-in-Answer pending outcome of an application to amend the specification filed 4 April 2005. On 9 November the applicant was notified of the allowance of the amendments and informed that, consequent upon the allowance of the amendments, the Evidence-in-Answer was due by 9 December 2005.
On 8 December 2005 Solstice filed a further request under Section 104 to amend the specification, a request for the Commissioner to issue a direction under Reg. 5.10(1) to defer Evidence-in-Answer pending outcome of the request to amend and an application for extension of time under Reg. 5.10 to file Evidence-in-Answer, requesting extension until 9 March 2006.
The delegate of the Commissioner communicated with the parties on 22 December 2005 proposing to issue a direction indicating that the time for serving Evidence-in-Answer will expire 1 month after the Commissioner notifies the parties of the outcome of the request to amend and requiring the applicant to obtain extensions of time (if needed) under Reg. 5.10(2) until such notification is made.
On 23 December 2005 Allergan filed notice of objection to the extension of time filed 8 December 2005. Further to this, on 6 January 2006, Allergan filed an objection to the direction proposed to be made by the Commissioner, and seeking to be heard on the matter in conjunction with the hearing in relation to the extension of time.
Both Matters were heard in Canberra on 25 January 2005. The applicant did not appear but filed submissions through its attorney, F.B. Rice & Co, Sydney, in support of its case. The opponent was represented by Mr Ross Heisey, Patent Attorney, assisted by Ms Maryam Khajeh, Technical Assistant, both of Davies Collison Cave, Sydney.
RELEVANT LAW
This case relates to a Direction by the Commissioner to defer the final date for filing of Evidence-in-Answer under Regulation 5.10 (1) and to an associated extension of time to file Evidence-in-Answer under Regulation 5.10 (2). These regulations state:
(1)The Commissioner may, on his or her own motion or on the application of a party:
a.give a direction that is not inconsistent with the Act or these regulations for the conduct of proceedings to which this Chapter applies; or
b.determine that a period prescribed in this Chapter (except in regulation 5.3 or 5.3AA, paragraph 5.4 (a), subparagraph 5.8 (1) (a) (i) or regulation 5.9A) is to be extended by such further period as the Commissioner reasonably allows.
(2)The Commissioner may extend the time within which the party may take a step prescribed in this Chapter (not being a step that is taken under regulation 5.3 or 5.3AA, paragraph 5.4 (a), subparagraph 5.8 (1) (a) (i) or regulation 5.9A):
a.on the application of a party in the approved form; and
b.on such reasonable terms (if any) as the Commissioner specifies; and
c.after the party has served a copy of the application on the other party.
Both these powers are subject to the requirements of subregulation 5.10(5):
(5)The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:

a.if he or she proposes to grant an application by a party is reasonably satisfied that the other party has been notified of the application; and

b.if he or she proposes to act on his or her own motion ensures that the parties are notified of the proposed action; and

c.in either case:
(i)gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and
(ii)is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances.
The operation of Regulation 5.10(5) has been considered in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243, A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 and in National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33. These decisions make it clear that reg. 5.10 confers a broad discretion that cannot be reduced to imperative compliance with particular requirements. It requires proper, genuine and realistic consideration of all the relevant aspects that pertain to the application including both the private interests of the parties concerned and the public interest to determine if, in all the relevant circumstances, the granting of the application is appropriate.
In the current case, the reason given by the applicant for requiring an extension under regulation 5.10(2) and a direction under 5.10(1) was because of pending amendments filed on 8 December 2005.
The opponent referred to a variety of decisions in which the same issue had been considered, including :
Stena Rederi Aktiebolag v Danyard A/S (1996) 34 IPR 111 in which the delegate found that an extension of time should only be granted if the amendments are non-trivial and stated that it was inappropriate for the applicant to be allowed to unnecessarily protract opposition proceedings by filing trivial amendments; Exxon Chemical Patents Inc v Lubrizol Corporation (1998) 41 IPR 126 in which the delegate did not issue a direction under regulation 5.10(1) despite the amendments being judged non-trivial due to what he considered to be an excessive delay in filing the request to amend. Also there was only one non-trivial amendment the delegate expressed some doubt as to whether this would affect the evidence; and Genetics Institute v Kirin Amgen Inc 44 IPR 257 in which the Federal Court noted that proceedings before the Commissioner should be conducted in an efficient and expeditious manner.
In its submissions the applicant referred to University of Georgia Research Foundation Inc v BioChem Pharma [2001] FCA 688 in which, Tamberlin J found it was preferable to stay the appeal pending the determination of amendments and that the patent applicant would be put to unnecessary time and expense in preparing what may well prove to be irrelevant evidence if they were required to file evidence in answer without being certain of the final form of the amendments.
In Affymax Technologies N.V. v Diversa Corporation [2001] APO 52, the delegate reviewed the above cases, and concluded that there were a number of factors to consider when determining whether an extension of time under regulation 5.10 is appropriate where there were pending amendments, viz:
(i)the nature of the amendments;
(ii)whether there would be any undue delays in proposing (or processing the amendments); and
(iii)the interests of the parties and the public.
In the light of the decisions in Ferocem (supra) and Goninan (supra), I also note that a relevant consideration is

(iv) the nature and significance of the Evidence to be served by the applicant
I consider that these points are directly relevant in the present case and will consider each of them.
DECISION
The Nature of the Amendments
The amendments proposed on 8 December 2005 require
(i)the deletion of the term “+/- 10%” from several claims and its replacement with
“+/- 0.2” in one appended claim,
(ii)the replacement of “a pharmaceutically acceptable buffered saline” with
“a pharmaceutically acceptable buffered solution comprising sodium chloride and a buffer” in independent claims 1 and 16, and
(iii)the replacement of “pH 4.5-6.5” with 5.5-6.0 in some appended claims.
The applicant did not argue that amendments (i) and (iii) are significant in the conduct of the hearing or in any way change the case to be addressed by the parties or the considerations required by the applicant’s expert.
I note that the term “+/- 10%” was inserted by the applicant in place of the word “about” in its amendments dated 4 April 2005. It would appear that the variability defined by this term was merely a clarifying statement of the variation with which a person skilled in the art would normally interpret the quoted pH figures. Consequently I consider that its removal would not substantively affect the case to be answered and is properly regarded as of a minor nature.
Item (iii) is only directed to some of the appended claims and therefore is not significant in terms of the validity of the claims overall.
The applicant argued that the amendments relating to item (ii) are non-trivial and will affect the evidence to be filed in the substantive opposition. Solstice explained that in an opposition to the corresponding application (EP-B-1112082) raised by Allergan and others, the EPO Opposition Division supported Allergan’s contention that the specification lacked support for the term “buffered saline” and that “saline” was unclear. The applicant therefore argued that clarifying amendments to the Australian application are required and are directly relevant to the outcome of the opposition. However, no similar objections to those raised in Europe have been filed as part of the Statement of Grounds and Particulars. Moreover, Allergan did not object to the amendment proposed in Australia to introduce the term “saline” on 4 April 2005. In addition, the action in Europe was based upon the acceptability of the proposed amendment under the provisions of Article 123 EPC, which is far more restrictive than that applied under Australian law with respect to section 40. In fact, the European opposition action involved no substantive validity issues, while in Australia Allergan has cited a number of documents under the heads of novelty and inventive step.
Consequently I do not find it credible that the relevance of the amendments to the opposition in Australia can be inferred from the arguments or outcome of the opposition process before the EPO.
In terms of the content of the amendment, prime facie there would seem to be little if any difference between a buffered saline and a buffered solution of Sodium Chloride and a buffer. A chemist would normally interpret saline as a solution of sodium chloride and a buffered solution as one which contains one or more buffers dissolved therein.
In the light of the above and contrary to the apparent beliefs of the applicant, I consider that the amendments are either trivial or of such a minor nature that they would have little, if any impact on the case to be answered in the substantive opposition.
Whether there would be any Undue Delays in Proposing (or Processing the Amendments)
The applicant has submitted that the amendments were made without undue delay. On the applicant’s evidence the filing of the amendments was prompted by arguments raised by Allergan at the Oral Proceedings in relation to the opposition action in Europe which took place on 20 October 2005 as confirmed by the decision brought down on 28 November 2005. The current amendments were filed with IP Australia on 8 December 2005. In my view this timeframe shows that the applicant has shown due diligence in filing the amendments within 14 days of the outcome of the European Opposition being known.
Since then, the amendments have been considered by IP Australia and are awaiting comments, if any, by the opponent before being finalised.
Consequently I consider that there have been no undue delays in proposing the amendments and no reason to expect any to arise in their prosecution.
The Nature and Significance of the Evidence to be Served
In the present case no Evidence in Answer has yet been served. Consequently no analysis can take place in respect of its nature or significance to the case raised by Allergan based upon the actual content of such evidence. However, it can be reasonably inferred from the actions of Solstice in continuing to prosecute the opposition and in filing thus far two sets of amendments to the specification, that it is the applicant’s intention to file Evidence in Answer directed to addressing the issues raised by the opponent and to seek the grant of its patent. I therefore regard it highly likely that the evidence to be filed will be directly related to the substance of the opposition and significant in terms of its outcome.
The Interests of the Parties and the Public
It is clearly in the interests of the opponent to have the matter heard and a decision reached as soon as possible to provide more commercial certainty in the marketplace. Equally, it is clearly in the applicant's interest to gain as much time as possible to prepare a defence against the opposition. I recognise, however, that the Evidence-in-Answer was originally due to be completed on 2 October 2004 and the applicant has already had four 3 month extensions of time and almost two months of the extension currently being considered. I also recognise that the applicant should not be put to unnecessary time and expense preparing irrelevant evidence due to uncertainty as to the form of the claims. In the present case, however, Solstice has not provided convincing evidence that the amendments will alter substantially the case to be answered or that extensive further consultation with the applicant’s expert is required in the light of the amendments.
The issue of the public interest was considered by Burchett J in the Ferocem (supra) decision. He concluded that in reaching a decision on this point, a balance is required between differing public interests. Although it is desirable in the interests of cost, efficiency and the orderly prosecution of matters before the Patent Office, that oppositions progress without delay, it is equally important that decisions be made on merit, rather than parties being completely shut out as a result of a failure in procedure. I note however that, although 18 months have elapsed since completion of the Evidence-in-Support, and 13 months since Dr Phillip Marshal was identified as Solstice’s expert, the applicant has not yet filed any Evidence-in-Answer.
In the present case the applicant has requested the issuing of a direction to “stop the clock” until such time as the amendments are accepted and advertised and the grant of an extension of time until 9 March 2006. I believe that, considering all the circumstances, the public interest would not be served by issuing such a direction.
CONCLUSION
I find that in all the circumstances the applicant, Solstice Neurosciences Inc, has failed to make out a case that justifies the issuing of a Direction by the Commissioner as requested.
As regards the request for the grant of three months extension in which to serve Evidence in Answer:
I am mindful of the importance of providing the opportunity for the substantive opposition to be decided on its merits with all relevant facts and arguments available. I am also aware that the nature and significance of the Evidence in Answer to be filed is highly likely to have a direct bearing on the outcome of the opposition.
I am also conscious that the applicant has shown diligence in filing the amendments as soon as the relevant information became available in respect of the European opposition and that the applicant filed the amendments in the belief that they would be directly relevant and affect the case to be answered. Although I consider that this belief is ill founded, I am led by the decision of the Delegate of the Commissioner in Race Lotto v AWA Limited [1998] APO 78. In that decision an erroneous understanding was found to justify an extension, although further extensions of that basis could not be sought. I consider the present case to be a similar situation in that Solstice believed that the amendments, in addressing the matters raised in Europe, would have a direct effect on the case to be answered in Australia.
I therefore find that in all the circumstances, it is appropriate that the extension of time sought by the applicant should be granted, but this reason alone could not be used to justify further extensions.
COSTS
In actions before the Commissioner, costs usually follow the event. In the present case, however, although the applicant was successful in the grant of the extension, the reasons they provided did not in themselves justify the extension. The opponent’s objection was therefore reasonable in the circumstances and I therefore award costs against the applicant.
Leigh R. Tristram
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : FB Rice & Company, Patent & Trademark Attorneys
Patent attorneys for the opponent : Davies Collison Cave, Patent & Trademark Attorneys